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K-Bro Linen Inc. (TSX:KBL) ("K-Bro" or the "Corporation") is pleased to announce that it has signed a share purchase agreement (the "Share Purchase Agreement") to acquire 100% of UK-based Fishers Topco Ltd. ("Fishers") for a base purchase price of £35 million (equating to approximately C$59 million, the "Base Purchase Price"), on a cash-free, debt-free basis and including £2.9 million in net working capital (the "Acquisition"). The Base Purchase Price is subject to an additional earn-out consideration on incremental EBITDA (subject to certain adjustments and a fixed linen expense of 11.4% of revenue) in excess of £5.0 million for the fiscal year ending December 31, 2017 (the "Earn-out Consideration"). As at September 30, 2017, LTM EBITDA was £3.7 million, which includes one-time exceptional costs and other non-cash charges of £1.4 million. EBITDA before one-time exceptional costs and other non-cash charges would have been £5.1 million, representing an attractive purchase multiple of approximately 7x, excluding the Earn-out Consideration. The Acquisition is over 15% accretive to LTM earnings per share, before one-time exceptional costs, other non-cash charges, amortization of acquisition related intangibles and synergies.

Established in 1900, Fishers is an iconic Scottish brand underpinned by over 100 years of operating history and is the largest commercial laundry business in Scotland and the North East of England providing linen and garments primarily to the hospitality sector. Fishers operates seven strategically located sites totaling approximately 232,000 sq. ft. and generated revenue of £34.3 million and EBITDA before £1.4 million in one-time exceptional costs and other non-cash charges of £5.1 million, for the trailing twelve month period ended September 30, 2017. The Acquisition will result in Fishers becoming an indirect wholly-owned subsidiary of K-Bro, and Fishers' existing senior management team will enter into new employment contracts with K-Bro.

"We are very excited to add the Fishers platform as K-Bro's first acquisition outside of Canada. Fishers is our largest acquisition to date and is aligned with our growth strategy. Fishers provides us with critical mass in an attractive new geography and is well positioned for future growth ." said Linda McCurdy, President & Chief Executive Officer of K-Bro. "The UK linen hospitality market is mature and highly fragmented and we expect to leverage Fishers' leading market position, experienced local management team, entrenched customer relationships and proven track record of stable and profitable operations to take advantage of the significant organic growth and consolidation opportunities available to us, similar to what we have achieved in Canada."

"The Fishers team is excited to join the K-Bro family." said Michael Jones, Managing Director of Fishers. "We see this transaction as a new chapter in Fishers' history. We look forward to sharing best-practices with K-Bro and see compelling growth opportunities ahead."

The Acquisition is expected to close on November 27, 2017 and is subject to customary closing conditions.

Transaction Highlights

Critical Mass in an Attractive New Geography: Fishers operates seven strategically located facilities with coast-to-coast coverage, representing an attractive new platform with critical mass in a mature and fragmented market.

Leading Market Position: Fishers is the largest commercial laundry business in Scotland and the North East of England. Fishers is an iconic Scottish brand underpinned by over 100 years of operating history with a reputation for high quality service and reliability.

Track Record of Stable Operations and Consistent Profitability: Fishers has historically delivered stable revenue and consistent EBITDA with modest capex requirements. Annual revenue and EBITDA before one-time exceptional costs and other non-cash charges has historically averaged approximately £35 million and £5 million respectively with limited volatility. Annual run-rate capital expenditures are anticipated to average approximately £1.3 million supporting a strong cash flow profile.

Experienced Local Management Team: Fishers has an experienced senior management team with significant industry knowledge and operational / financial expertise. The existing team will enter into new employment contracts with K-Bro.

Diversified Customer Base: Fishers has a stable customer base with historical retention rates of approximately 90%, driven by entrenched customer relationships with major hotel groups and leading independent hotels. The customer base is diversified with Fishers' top 10 customers representing approximately 40% of revenue.

Well Positioned for Future Growth: Fishers has strong organic growth opportunities, including increasing capacity and investing in innovation. Capacity can be expanded through investment in new modern equipment and Fishers is focused on product innovation and differentiation (ZHEN premium linen brand targeting the luxury hotel market and embedded radio frequency identification technology in circulated linen) to secure new contracts and improve volumes on contract renewals.

Transaction Financing and Economics

K-Bro has increased its existing senior secured revolving credit facility to C$100 million (the "Amended Credit Facility"). The amendment will be effective concurrent with the closing of the Acquisition at which point the Amended Credit Facility will be drawn to finance the Base Purchase Price. K-Bro is committed to maintaining a conservative and flexible balance sheet to support future growth. Pro forma the anticipated build-outs of the Toronto and Vancouver facilities, K-Bro's total leverage will be below 2.5x.

The Acquisition is accretive to K-Bro's LTM earnings per share by over 15% before one-time exceptional costs, other non-cash charges, amortization of acquisition related intangibles and synergies. K-Bro has identified certain operational efficiencies at Fishers, which are expected to enhance future earnings.

Participants are asked to dial in at least 15 minutes prior to the start of the call. For those unable to participate on the live call, a replay will be made available until Tuesday, December 5, 2017 by dialing 1-855-859-2056, pass code 3372869. The public is invited to listen to the live conference call or the replay.

The conference call will be webcast live over the internet and can be accessed by all interested parties at the following:

To listen to the live webcast, visit the Corporation's website at least 15 minutes early to register and download and install any necessary audio software. For those unable to listen during the live webcast, an audio replay will be available shortly after the conclusion of the conference call for a period of 90 days.

CORPORATE PROFILE

K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts. K-Bro currently operates nine processing facilities and two distribution centres under three distinctive brands, including K-Bro Linen Systems Inc., Buanderie HMR and Les Buanderies Dextraze, in ten Canadian cities: Québec City, Montréal, Toronto, Regina, Saskatoon, Prince Albert, Edmonton, Calgary, Vancouver and Victoria.

Additional information regarding the Corporation including required securities filings are available on our website at www.k-brolinen.com and on the Canadian Securities Administrators' website at www.sedar.com; the System for Electronic Document Analysis and Retrieval ("SEDAR").

Fishers was established in 1900 and now cleans, irons and delivers more than two million items a week, providing linen rental, workwear hire and cleanroom garment services to the hospitality, healthcare, manufacturing and pharmaceutical sectors. Fishers' client base includes major hotel chains and prestigious venues across Scotland and the North East of England. The company operates seven sites in Scotland and the North East of England:

This news release contains forward-looking information that represents internal expectations, estimates or beliefs concerning, among other things, future activities or future operating results and various components thereof. The use of any of the words "anticipate", "continue", "expect", "may", "will", "project", "should", "believe", and similar expressions suggesting future outcomes or events are intended to identify forward-looking information. Statements regarding such forward-looking information reflect management's current beliefs and are based on information currently available to management.

These statements are not guarantees of future performance and are based on management's estimates and assumptions that are subject to risks and uncertainties, which could cause K-Bro's actual performance and financial results in future periods to differ materially from the forward-looking information contained in this news release. These risks and uncertainties include, among other things: (i) risks associated with acquisitions, including the possibility of undisclosed material liabilities; (ii) K-Bro's competitive environment; (iii) utility costs, minimum wage legislation and labour costs; (iv) K-Bro's dependence on long-term contracts with the associated renewal risk; (v) increased capital expenditure requirements; (vi) reliance on key personnel; (vii) changing trends in government outsourcing; (viii) changes or proposed changes to minimum wage laws in Ontario, British Columbia, Alberta, and the United Kingdom, which could have an adverse effect on expenses in respect of employees situated in those jurisdictions. While a portion of such expenses may be passed on to or be recoverable from customers, there can be no assurances that that will occur and (viii) the availability of future financing. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include: (i) volumes and pricing assumptions; (ii) expected impact of labour cost initiatives; and (iii) frequency of one-time costs impacting quarterly and annual financial results; and (iv) the level of capital expenditures. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements regarding forward-looking information included in this news release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this news release. Forward looking information included in this news release includes, without limitation, the terms, conditions, timing and completion of the Acquisition and the Amended Credit Facility and the expected revenues, earnings, growth opportunities following the closing of the Acquisition and statements with respect to future expectations on margins and volume growth.

All forward-looking information in this news release is qualified by these cautionary statements. Forward-looking information in this news release is presented only as of the date made. Except as required by law, the Corporation disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.